What is the tenant fees act 2019?

Renting a home can sometimes feel overwhelming, especially with various fees and charges that need to be paid. To make things simpler and fairer for renters, the Tenant Fees Act 2019 was introduced. 

Here, we’ll go into the details of the Tenant Fees Act 2019 so that you have a clear understanding of what is expected of you as a landlord. 

What is the Tenant Fees Act 2019?

The Tenant Fees Act 2019 was introduced to protect renters from landlords charging excessive fees and to improve transparency in the private rental sector. It applies to all assured shorthold tenancies, student accommodation, and licences to occupy housing in England and was introduced in June of 2019. 

Banning unfair fees

The Tenant Fees Act 2019  sets out specific rules on what landlords and letting agents can charge tenants and also prohibits landlords and letting agents from charging any fees that aren’t explicitly permitted. This means that most upfront fees that tenants used to pay are now banned. Some examples of these banned fees include:

• Viewing fees
• Tenancy set-up fees
• Check-in/check-out fees
• Third-party fees (for example, referencing services)

Permitted payments

There are still, however, fees that landlords are within their rights to charge tenants. These fees are deemed reasonable to charge tenants, and still ensure the rental process is fair for both landlords and tenants.  

• Rent: The main payment that tenants make for living in your property.
• Tenancy deposit: This is usually capped at five weeks’ rent for properties with an annual rent under £50,000, and six weeks’ rent for properties with an annual rent of £50,000 or more.
• Holding deposit: Capped at one week’s rent to reserve a property, the holding deposit must be refunded or used towards the rent or tenancy deposit. 
• Payments for defaults: Charges for late rent payments or lost keys, but these must be reasonable and specified in the tenancy agreement.
• Changes to the tenancy: If the tenant requests a change to the tenancy agreement, a charge of up to £50 (or reasonable costs if higher) is permitted.
• Early termination: If a tenant requests to end the tenancy early, landlords can charge for the loss of rent or costs associated with finding a new tenant.
• Utilities and council tax: If stated in the tenancy agreement, tenants can be required to pay for utilities, council tax, TV licences, and communication services.

Holding deposits

When a tenant pays a holding deposit to reserve a property, there are specific rules that you, as a landlord, should follow. 

For example, the holding deposit must be refunded within 15 days if the tenancy doesn’t go ahead, unless the tenant decides not to proceed, fails the right to rent check, provides false information, or doesn’t take reasonable steps to enter the tenancy agreement. If the tenancy proceeds, the holding deposit can be used towards the rent or tenancy deposit.

Enforcement and penalties

It is important to note that local authorities enforce the Tenant Fees Act 2019, and there are significant penalties for landlords if you are non-compliant. 

• First offence: Fines up to £5,000.
• Second offence: If another breach occurs within five years, it’s considered a criminal offence with unlimited fines, with the potential for banning orders, which will prevent you from being able to rent out property. 

Benefits of the Tenant Fees Act 2019

The Tenant Fees Act 2019 was implemented to make the renting process more fair and affordable.  This is the most obvious benefit as tenants will be able to start saving more money when moving into a new property to rent. 

Also, there is now more transparency between landlords and tenants, so there is a clearer understanding of the costs involved in renting to avoid any surprise payments. In this way, the Tenant Fees Act 2019 ensures that fees charged to tenants are reasonable and fair, creating a more balanced rental market. 

Top tips 

There are a few things that both landlords and tenants should keep in mind before getting involved in the rental process. Let’s begin by looking at some top tips for tenants. 

For tenants

Tenants should make themselves aware of the fees that are permitted and those prohibited under the Tenant Fees Act 2019. This way, you’ll feel more empowered to challenge a landlord when confronted with unfair fees. 

Also, make sure that you report any of these unfair fees to your local authority so that they can look into it if they need to. 

For landlords

As a landlord, you also have a responsibility to make sure that you update your practices and that your fees comply with the Tenant Fees Act 2019. This way, you’ll build trust with your tenants and they’ll automatically feel confident in your abilities as a landlord. 

Clear communication is also key when dealing with payments from tenants. You can ensure that you communicate clearly by informing tenants in a transparent manner about any payments they need to make. 

Lastly, it is important to stay up to date with any changes in rental regulations to make sure that you’re compliant. 

The Tenant Fees Act 2019 represents a significant step towards a fairer and more transparent rental market in the UK. So, whether you’re new to the landlord game, or have been renting out property for years, being informed about the Tenant Fees Act 2019 will help you work your way through the rental process with confidence.

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